R3 and TradeIX Develop Blockchain
Solution for Open Account Trade Finance
Distributed, by Giulio Prisco, Oct 05, 2017
R3 and TradeIX are developing an end-to-end
open account trade finance business network,
with the collaboration of twelve high-profile
financial institutions: Bangkok Bank, Barclays,
BBVA, Bladex, BNP Paribas, Commerzbank,
CTBC Bank, ING, Intesa Sanpaolo, Shinhan
Bank, Royal Bank of Scotland and Wells
Fargo."This project represents a big step for the
trade finance industry, David Sutter, the head
of platform strategy at TradeIX, said. Cutting-
edge technology coupled with a strong spirit of
collaboration amongst many of the world's
leading trade banks, corporates and technology
providers is helping to make trade finance
simpler, less risky and more inclusive as well as
connecting the ecosystem of banks, buyers,
suppliers, technology providers, insurers and
others critical to facilitating global open-account
trade flows.
An open account trade flow means that goods
are delivered before payment is due. Obviously,
open account transactions are advantageous for
buyers, but risky for sellers, who often need
trade financing before embarking on a deal. The
new initiative of TradeIX and R3 seems to
represent a promising way to better organize
the sector with streamlined operations, with a
potential to enable flexible and efficient working
capital finance solutions for the clients of the
financial operators involved in the project.
"For the first time in history, we have both the
opportunity and the tools needed to transform
and rewire the worlds global trade finance
Source: Distributed
infrastructure, added Sutter. In doing so, we
can make fundamental improvements to the
benefit of the entire trade ecosystem. TradeIX
administers the TIX Platform, an open platform
providing applications, technology tools and
core infrastructure for the trade finance
ecosystem.
R3 provides Corda, a distributed ledger
platform designed specifically for financial
services. These two platforms will power the
new trade finance business network. The R3
press release explained that, with this new
initiative, financial institutions will be able to
automate pre- and post-shipment financing and
risk mitigation for corporate buyers and sellers
around the world. Standard trade finance smart
contracts on a distributed ledger infrastructure
will provide secure and automated financing of
supply chains using a single record for critical
trade data including identities, purchase orders,
invoices, shipping and logistics information,
trade assets, financing activity, credit risk and
more.
Earlier this year R3, TradeIX and a core group
of R3 members teamed up to redesign the
infrastructure behind open account trade
finance utilizing our Corda platform and the TIX
Platform of TradeIX, David Rutter, CEO of R3,
said. Existing trade finance infrastructure is in
serious need of an upgrade, and this project is a
big step toward the adoption of reliable, efficient
and standardized processes for the entire
sector.
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